Coca-Cola Aquires Zico Coconut Water

Coconut water is now big business

The Coca-Cola Company has acquired the outstanding ownership stake in Zico. The announcement will unlock more capability for Zico, including marketing, selling, manufacturing, innovation and distribution opportunities.

Coca-Cola are not the only ones vying for a slice of the coconut beverate market. Pepsi led the way in 2009 by acquiring Amacoco, Brazil's largest coconut water company and one year later, bought a larger stake of O.N.E., the third largest US brand after Vita Coco and Zico.

Not all of Pepsi's ventures reaped the rewards. A failed partnership with GNC to produce a coconut water brand called Phenom never really succeeded and Pepsi is now selling its inventory and getting out of the market after one year. It's believed that GNC didn't think it could get enough market share to make the venture worth it.

Is Coco-Cola coming soon

There are now 250 companies that have a beverage with some form of coconut water in it, according to John Craven, founder and CEO of BevNet, a beverage publisher. And it's not slowing down. Craven says roughly 3 in 10 new beverages coming to market today have coconut water as a component.

According to Coca-Cola Revenue in the coconut water segment has nearly doubled every year since 2004.

The real challenge for growth of the western markets for coconut water is the taste and texture. Unlike asian and pacific regions where coconuts are a part of life, the lack of sugary sweetness that the western pallet is accustomed to may be the achilles heel.